Court Hears Challenge to Obama NLRB Recess Appointments

The National Labor Relations Board (NLRB), normally with five members, now has three. And not long from now, it may have just one. President Obama's apparent desire to circumvent Senate intent is part of the problem. On Wednesday, December 5, a three-judge panel for the U.S. Court of Appeals for the District of Columbia Circuit heard oral arguments in a case concerning Obama's filling of three vacant NLRB slots nearly a year ago. The case, Noel Canning v. NLRB, originated in a complaint filed by a Washington State business that the president had usurped the Senate's constitutional powers of appointment because lawmakers were not in recess. And since these were not actual recess appointments, the president lacked the authority to make them. The eventual outcome will have implications for the board's ability to operate over the long term.

Union Corruption Update back in January described the circumstances surrounding the case before it even became a case. Here's a quick review: On January 4, President Obama appointed three persons to the National Labor Relations Board. Custom long has dictated that the board be comprised of three persons from one major political party and two from the other. With one Democrat (Mark Gaston Pearce) and one Republican (Brian Hayes) on the board, it was a foregone conclusion, given the Democratic administration at hand, that the appointees would consist of two Democrats and one Republican. The Democrats were Sharon Block and Richard Griffin; the Republican was Terence Flynn. As part of the package, the president also nominated former Ohio Attorney General Richard Cordray to serve as director of the new Consumer Financial Protection Bureau (CFPB). All were sworn in office five days later.

As far as NLRB went, the appointments were a response to several years of a situation that ranging from barely workable to unworkable. For a 27-month period, starting in January 2008, the board operated with only two members, Chairman Wilma Liebman (Democrat) and Peter Schaumber (Republican). Early in 2010, President Obama nominated two Democrats, Craig Becker and Mark Gaston Pearce, each with extensive experience as a union lawyer, to serve on the board. Each faced a GOP Senate filibuster. Obama, rather than face a drawn-out process, made temporary (i.e., up to two years) spring recess appointments. They assumed office in April. Two months later, Pearce, but not the highly controversial Becker, received a full-term Senate appointment, along with the Republican, Hayes. That put the NLRB back at full strength with five members.

The sense of relief would be short-lived. Schaumber's tenure ended in August 2010. Liebman's term ended a year later, with Pearce assuming her chairman title. And in short order, the board would be down to two again because Senate support for approving Becker for a full appointment wasn't there. His temporary term ran out on January 3, 2012. Making the situation more problematic was that the U.S. Supreme Court back in June 2010 had ruled in New Process Steel v. NLRB that two members were insufficient for a quorum to render decisions. All of the roughly 600 decisions made during the 27 months when only Schaumber and Liebman convened, said the High Court, would have to be reviewed. That doesn't even include the huge caseload accumulating since then. Recognizing the need to bring the board back up to par, Obama made three recess appointments on January 4. But were they actually recess appointments? The evidence suggests they weren't.

Article II, Section 2 of the U.S. Constitution states: "The President shall have power to fill up all Vacancies that may happen during the Recess of the Senate, by granting Commissions which shall expire at the End of their Next Session." Such appointments, of course, rest on the assumption that the Senate, in fact, is in recess. Yet the evidence suggests that in this case it wasn't. Obama had nominated Block and Griffin to the National Labor Relations Board on December 15, 2011. The Senate adjourned for the Christmas holiday season the next day, December 16, but without formally declaring a recess. Lawmakers would be in "pro forma work sessions," conducted every three days until reconvening on January 23, 2012. Since the appointments were made on January 4, they apparently did not occur during a recess and hence were not lawful.

Two months later, on the other side of the country, a chain of events would give such a suspicion legal weight. A Yakima, Wash.-based beverage canning and bottling company, Noel Canning, in March sued the NLRB following a February board ruling against the company in favor of Teamsters Local 760. The union had claimed it reached a collective bargaining agreement with the company in December 2010; Noel Canning countered that no such agreement existed. Rather than accept defeat, the company filed a complaint in federal appeals court to overturn the ruling. The company and its lawyer argued that because the status of three (Obama-appointed) NLRB members was in doubt at the time of the ruling, the ruling itself effectively had been rendered with only two members. Thus, it contravened New Process Steel. Not long after, Senate Majority Leader Mitch McConnell and 41 other GOP senators, along with the U.S. Chamber of Commerce and several other pro-business organizations, filed amicus briefs in support of Noel Canning.

An opening round of arguments in the case was held in Chicago on November 30. The latest hearing occurred in Washington, D.C. on December 5. President Obama, said senators' lawyer Miguel Estrada in the latter hearing, abused his power by appointing officials who required Senate confirmation. By defining "recess" in an overly broad manner, the administration risked emptying the term of meaning. Conceivably, he said, recess appointments could occur if the Senate left for the weekend or even took a lunch break. Constitutional integrity thus requires that the executive branch defer to the legislative branch to define "recess."

The Obama administration responded that the Senate had no intention of acting as a legislative body during its work sessions. Justice Department lawyer Beth Brinkmann told the packed courtroom that the Senate took no votes, accepted no official messages from president, and held no debates. Sessions typically involved one senator appearing in the chamber every third day to pound the gavel to convene, and then moments later, pound it again to dismiss. Had the president not exercised his authority to make the appointments, his inaction, as department court papers argue, would have "substantially impaired the functioning of an executive branch agency." That the Senate didn't formally declare a recess was true only in letter, Brinkmann said. There is "a shared understanding between the executive and legislative branches for more than a century" that a recess occurs when the Senate is not available to conduct its business.

Estrada responded that it isn't up to the president to determine whether the Senate is in session. "The court must defer to the Senate calling its work a session absent evidence that that is a clear subterfuge," he remarked to the courtroom audience, which included Sen. McConnell and White House top lawyer Karen Ruemmler. Moreover, it isn't accurate that these work sessions were ruses to avoid declaring a formal recess. On December 23, 2011, in fact, the House and Senate unanimously passed a two-month extension of payroll tax deductions, unemployment benefits, and health care provider reimbursements. President Obama quickly signed this legislation.

Constitutional fealty ought to require that the definition of "recess" exist within reasonable bounds. But it is hard to adhere to this principle when the NLRB lacks the ability to generate a quorum and therefore its own legitimacy. Another crisis may be just around the corner. This past July, Terence Flynn, a Republican, stepped down. He had submitted a letter of resignation in May following allegations by a pair of reports by the NLRB Office of Inspector General that he leaked confidential information to former NLRB members and other persons outside the agency. And just two days ago, December 16, Brian Hayes' term expired. In other words, if the appeals court invalidates the president's appointments, the NLRB would be down to just one member, Mark Pearce. And Pearce's appointment expires on August 27, 2013. Even if the court upholds the recess appointments, then, the board would lose its quorum capacity anyway.

For now, a federal appeals court in Washington, D.C. holds the cards. The three judges who heard the case two weeks ago - David Sentelle, Karen Henderson and Thomas Griffith - are appointees, respectively, of Presidents Ronald Reagan, George H.W. Bush and George W. Bush, each a Republican. And the senators' attorney, Miguel Estrada, during the administration of George W. Bush had been nominated for the very judgeship Griffith now holds; Estrada withdrew his name after a more than two-year-long filibuster by Senate Democrats. But this doesn't necessarily guarantee a victorious outcome for Noel Canning and its GOP supporters. The court simply, and very likely, could decide to avoid issuing a ruling altogether, leaving the matter up "to the thrusts and parries of the political branches," to use Judge Griffith's words. Indeed, Catholic University law professor Victor Williams has filed an amicus brief in this case arguing that recess appointments are not subject to judicial review.

The case may wind up in the lap of the Supreme Court. It may take at least another year, possibly two, before this whole thing gets sorted out. It's a measure of comfort that the NLRB will get some work done through its General Counsel's Office or its 26 regional offices, including issuing Section 10(j) injunctions against clear-cut cases of unfair labor practices. But the dominant reality right now is that the National Labor Relations Board has become a classic lawyers' paradox: People ferociously fight over it yet risk creating a situation in which there eventually might not be anything left to fight over.